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Carrier faulted for clumsy wording

It was a close call for an insurance company that wanted a plaintiff’s case heard in federal court.

Nobody doubted that Selective Way Insurance Company was a citizen of New Jersey entitled to remove a suit filed by DBS Inc. to the Norfolk federal court, on the basis of diversity jurisdiction. But a clumsily worded notice of removal left the carrier scrambling to amend the notice to clear up its citizenship.

“Grammar matters,” said Senior U.S. District Judge Henry Coke Morgan Jr. Analyzing the removal notice’s use of tenses and clauses, Morgan said the grammar in the notice was unclear.

See how quickly you can spot the problem. Extra points for diagramming this sentence: “At the time this action began, the defendant Selective Way Insurance Company was, and still remains incorporated in the State of New Jersey and has its principal place of business in New Jersey.”

Selective had to allege both its state of incorporation and its principal place of business both at the time the complaint was filed and at the time the notice of removal was filed, the court said, and it gave the carrier’s “grammatically unclear allegation of diversity jurisdiction” a failing mark.

Trying to amend a notice of removal after the 30-day statutory removal period has ended is no pro forma matter. In fact, courts in the Eastern District of Virginia have split on the question, according to Morgan.

Some courts follow a “strict approach” and only allow correction of “imperfectly stated” allegations but no new or supplemental allegations. Other decisions follow a “more liberal approach” and allow supplemental allegations, Morgan said. An unpublished 4th Circuit opinion was the trump card that expressed the appellate court’s preference for the more liberal approach.

Even under a militant application of the rules of grammar, Morgan said he still would be inclined to allow Selective to clean up the grammar in its “imperfectly stated” allegations.

The court denied the motion to remand in its July 10 opinion in DBS Inc. v. Selective Way Ins. Co.
-Deborah Elkins

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